The Bank of Canada has opted to maintain the current 5% interest rate, signaling no adjustments at this time.

The Bank of Canada has affirmed that its key overnight interest rate will remain at five percent, maintaining its benchmark for the fourth consecutive time. This widely expected decision follows the last interest rate hike in July 2023.

During a press conference on Wednesday morning, Tiff Macklem, the governor of the central bank, noted a shift in discussions. The focus is transitioning from determining the appropriate height of the bank’s policy-setting interest rate to evaluating the duration that the current “restrictive stance” of a higher interest rate should be maintained.

Despite the potential change in communication, the bank is not indicating an imminent decrease in interest rates, as concerns persist regarding inflation.

In a prearranged speech, Macklem highlighted that inflation has been on the decline in recent months, attributing it to the impact of increased interest rates implemented by the Bank of Canada, which have contributed to slowing down the economy.

However, he emphasized that “inflation remains elevated,” underscoring the persistence of inflationary pressures. The governor informed reporters that it is “premature” to entertain discussions about reducing interest rates.

Macklem acknowledged that the possibility of additional rate hikes is not off the table if inflation surges. Nevertheless, he also expressed that if the economy follows the current projections closely, he does not anticipate deliberations on an interest rate hike.